Physicians Must Take Control of ACO ‘Construct’: A Conversation With Douglas G. Smith

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Douglas SmithRecent media coverage of accountable-care organizations (ACOs) has included considerable speculation, both about how ACOs will evolve and about the manner in which health-care providers should proceed, in light of such evolution. Douglas G. Smith, FRMBA, is senior vice president of strategic initiatives at Integrated Medical Partners ( IMP), a Milwaukee, Wisconsin-based provider of profit-improvement solutions for imaging practices. He says that the Medicare model for ACOs, created as a product of federal health-care reform, will not stick. “There are too many criteria, among other complications,” he notes.

Smith, who also serves as managing partner of Barrington Lakes Group (Barrington, Illinois), with which IMP merged in May 2011, shared his thoughts on the future of ACOs and the role of actionable information in planning for a move in that direction.

RadAnalytics: How do you think that ACOs will evolve? What shape will they take?

Smith: There will almost certainly be several different models, including physician-driven ACOs and hospital-driven ACOs. There may be highly integrated models composed of group practices, and there may be ACO–look-alike models with limited integration—such as joint ventures and independent practice associations (IPAs).

RadAnalytics: What advice has IMP been giving radiology practices and imaging centers with regard to ACOs?

Smith: There currently is limited focus on ACOs within the diagnostic-imaging sector; the Medicare Physician Fee Schedule and bundling of payments are primary concerns today. We are advising our clients to step away from that discussion for a moment, however, and to start seeking a seat at the table now, while entities are in the process of deciding how they are going to structure their ACOs and which providers they will want to include. We are emphasizing that if they wait, they will be hard-pressed to catch up because there will be many players jockeying for position.

Another piece of advice is to assess what type of ACO or ACO look-alike—maybe an IPA—they want to participate in, and where they would be most comfortable, given their own structure, financial picture, contractual responsibilities, and goals for growth. Some may prefer a super-IPA; others may want to function as a sub-ACO of a larger ACO counterpart.

Most important, IMP and Barrington Lakes Group have long promulgated the idea that radiology practices need to turn data into information that is actionable and/or can be leveraged, applying that information not only for the purpose of internal operational and clinical continuous improvement, but to promote competitive differentiators to customers and to demonstrate value consistently. Such information will play a role in helping practices decide where they will fall in the ACO scheme of things and in reinforcing that value with potential partners.

RadAnalytics: When practices are ready to shift to an ACO model, what information might they use to identify an ACO or ACO look-alike that they want to pursue?

Smith: There are some subtle variances between ACOs that can only be discerned using business intelligence (actionable information). Information that can be leveraged for this purpose includes patient populations’ imaging utilization by site of service because the degree to which it matches the population to be served by the ACO is an indicator of a good—or not so good—match. Gross-margin contribution by modality is another, for the same reason.

RadAnalytics: What about information that practices can enlist to differentiate themselves from the pack—to position themselves as providers of choice for a given ACO?

Smith: Subspecialty imaging expertise can be demonstrated with information that clearly indicates a high imaging volume in multiple subspecialties and, accordingly, a depth and breadth of expertise others may not have. It is impressive when a practice can show that its does a huge volume in subspecialties A, B, C, and D—and that these service lines are highly profitable.

Information that demonstrates (by site of service and provider) how often practices meet or exceed turnaround-time benchmarks also ranks on this list, as do quality-assurance results that cover the entire continuum of care. Practices can play the value card by sharing actionable, leverageable information that points to highly appropriate imaging utilization, downstream revenue generation, and profit/loss for all service lines, by site of service.

RadAnalytics: